please answer fully and thoroughly Please answer all the sub-questions and be concise in your answers, which should be between 1-2 pages (single-space) for the first four questions. The fifth question, which is a case analysis should be no more than 4 pages (single-space). Please answer all the sub-questions and be concise in your answers, which should be between 1-2 pages (single-space) for the first four questions. The fifth question, which is a case analysis should be no more than 4 pages (single-space). Question 1: What are the essential characteristics of ICSID Arbitration vis-à-vis other forms of arbitration and in particular arbitration under the UNCITRAL Rules? What are the main advantages of ICSID Arbitration if any? Question 2: The definition of investment is the basis for acceptance of jurisdiction rationae materiae by the tribunal. Does the ICSID Convention include a definition of investment? What is the significance of the inclusion or not of such a definition in the text of the Convention? Which tribunal set out the main characteristics of investment and how have subsequent tribunals reacted to this interpretation? Question 3: What is an “umbrella” clause and how often is it included in treaties? Have investor-state tribunals interpreted it in a consistent way? Give a few examples of interpretation by tribunals and comment on a difference of interpretation, if any. Have these interpretations led to a particular reaction by states during the negotiation of a new generation of BITs? Question 4: What criteria have arbitral tribunals used to differentiate between a regulatory action requiring compensation and one that does not? In other words, when can a regulatory action is considered expropriatory? Which sources of jurisprudence have influenced investment arbitration tribunals in finding expropriation and how? How has investor-state jurisprudence on expropriation has shaped the new generation of international investment agreements? Question 5: Renovable Investments Inc. (hereinafter “Renovable”) is a leading company in the energy sector, incorporated under the laws of Renewland. Renovable decided to invest in the energy generation sector in the small country of Valonia. For this purpose, in 2007, it incorporated a company called Powerix Corp. (hereinafter “the company” or “Powerix”) under the laws of Valonia. Renovable owns a 70% share in Powerix; the remaining shares are owned by the employees of the company (all of them Valonian nationals). The production of energy in Valonia comes from the following sources: 60% of the energy is provided by a government-owned nuclear energy plant; 30% is provided by a coal powered plant (hereinafter the “Coal Plant”) which until 2008 was operated by a state-owned electricity company); and the remaining 10% is provided by four five co-operatives that operate small oil power plants. In May 2008, Valonia invited Powerix to build and operate a new gas-fired power plant that would replace the Coal Plant. Powerix accepted the invitation, which was generous in promises, and, in December 2008, concluded an agreement with Valonia in that regard. As part of the agreement, the company were to be in charge of the maintenance and operation of the Coal Plant until the new power plant became operational. The planning of the new power plant started immediately after the conclusion of the agreement. Under Valonian law the construction and operation of a power plant requires two permits from the responsible authorities: 1) the “emission control permit”, which would permit the construction and operation of the plant, and 2) the “water use permit”, which would allow the use of cooling water out of the river Valo (the main river in Valonia) and the return of such water back to the river. Under the laws of Valonia, the decisions must be taken by the Ministry of Energy within seven months after the filing of a complete application. Powerix applied for the permits immediately after the conclusion of the agreement in December 2008. In April 2009, Mr. Gonzalo Figueroa, a leader of the Green Party, was appointed Minister of Energy. By letter of May 20, 2009, the government indicated to Powerix that the water use and emission control permits could not be issued. The reason given was that the temperature of the water returned to the river would cause serious harm to the ecosystem of the river Valo and that they would need lower CO2 emissions to meet their international commitments. The government invited the company to amend its application and to include the following undertakings: 1) that Powerix would further reduce the temperature of the water that was to be returned to the river, and 2) that Powerix would install at its own cost, a carbon capture and storage plant. Following several meetings, in September 2009, an agreement was reached between Powerix and the government. Powerix accepted the demands put forward by the government and, in return, the government granted Powerix a “preliminary start permit” that allowed the company to initiate the construction of the plant and indicated that the water and emission control permits would be issued by the end of January 2011. In October 2009, the company commenced the construction of the power plant, whose cost was estimated at $800 million. In September 2010, the question of the new power plant played a central role in the electoral campaign of the Green Party for the parliamentary elections. In a press statement of September 10, 2010, a representative of the Green Party had publicly declared that, if reached power, the power plant would be stopped. Contrary to what had been indicated by the Ministry of Energy (“hereinafter “the Ministry”), the water and emission control permits were not granted in January 2011. On March 22, 2011, the Green Party won the elections and obtained an absolute majority in the Parliament. On April 28, 2011, the Ministry again extended the time limit for the issuance of the permits until July 2011. On May 10, 2011, the Parliament enacted a law for the promotion of wind powered energy that granted significant tax advantages and subsidies to those operators willing to change their oil powered plants for windmill electric generators and to new entrants in the electricity production field. On November 25, 2011, the Ministry ultimately granted the emission control permit and the water use permit. However, both permits were coupled with new restrictions. First, the amount of cooling water which could be used by the power plant would be dependent upon the amount of surface water of the river Valo. The effect of this limitation was that the plant would have to reduce the production of energy by 40% during summertime. As a result, the plant would have significantly less cooling water and for some weeks of the year it might be obliged to shut down. Secondly, the water use permit included a much lower temperature of the cooling water returned into the river. Third, the Ministry increased the duration of the monitoring phase of the efficiency of the so-called “fish-stair” in the river from one to two years, which delayed the start of the operation of the plant by one year. This extended the period that Powerix was obliged by the contract to operate and maintain the obsolete Coal Plant. In the meantime, construction of the new plant was near completion but, because of the delays and new requirements imposed by the government, the initially planned budget of $800 million rose to $1.2 billion. Renovable and Powerix had to seek additional financing, which was only available on less favorable terms than the original financing. Despite numerous meetings with the government, Renovable and Powerix saw very few prospects for the operation of the plant as initially planned and agreed with the government and they calculated, as a result, a significantly lower forecast of return on their investment. After additional failed attempts to resolve their differences with the government, Renovable and Powerix submitted a request for arbitration to ICSID under the Renewland-Valonia BIT, which entered into force in 1995. In their claim, Renovable and Powerix alleged that Valonia had engaged in a pattern of conduct that constituted unfair and inequitable treatment in violation of the Article 10.2 of the Treaty. Article 10.2 of the Renewland-Valonia Bilateral Investment Treaty “Investors and Investments of each contracting party shall at all times be accorded fair and equitable treatment in the territory of the other contracting party”. 1) As counsel representing Renovable and Powerix, develop the argument that Valonia treated your clients unfairly and inequitably in violation of Article 10.2 of the BIT. 2) As counsel representing the Valonian government, develop the argument that Valonia did not violate the Article 10.2 of the BIT and had not treated Renovable and Powerix unfairly nor inequitably.
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